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Iran's military might

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The Iranian Defense Ministry released this photo of what it says are Nasr 1 (Victory) missiles in a factory in Tehran, Iran, on March 7. On state television, Gen. Ahmad Vahidi announced a new production line of highly accurate, short-range cruise missiles capable of evading radar. Gen. Vahidi said the missile named Nasr 1 (Victory) will be capable of destroying targets up to 1,000 tons in size. Iran frequently makes announcements about new advances in military technology that cannot be independently verified. Vahid Reza Alaei/Iranian Defense Ministry/AP

Members of Iran's Basij militia march during a parade to commemorate the anniversary of the Iran-Iraq war (1980-88), in Tehran September 22, 2010. Morteza Nikoubazl/Reuters

Commander of Iran's Revolutionary Guard Gen. Mohammad Ali Jafari, gives a press conference in Tehran, Iran on Sept. 16, 2012. The top commander in Iran's powerful Revolutionary Guard warned that 'nothing will remain' of Israel if it takes military action against Tehran over its controversial nuclear program. Vahid Salemi/AP

Members of Iran's Basij militia march during a parade to commemorate the anniversary of the 1980-88 Iran-Iraq war, in Tehran, Iran, on Sept. 22. Morteza Nikoubazl/Reuters

A Sajjil missile is displayed by Iran's Revolutionary Guard, in front of a portrait of the Iranian supreme leader Ayatollah Ali Khamenei, during a military parade commemorating the start of the Iraq-Iran war 32 years ago, in front of the mausoleum of the late revolutionary leader Ayatollah Khomeini, just outside Tehran, Iran, Sept. 21, 2012. Vahid Salemi/AP

Soldiers from Iran's army fire an anti-aircraft gun during the Defenders of Velayat (Pontificate) Sky Manoeuvre 2 near Arak, Iran, in 2009. Ali Shayegan/Fars News/Reuters/FILE

Iranian army troops march in a military parade commemorating the start of the Iraq-Iran war 32 years ago, in front of the mausoleum of the late revolutionary founder Ayatollah Khomeini, just outside Tehran, Iran, Sept. 21, 2012. Vahid Salemi/AP

The Iranian Defense Ministry claims this photo released on Sept. 28 shows Bavar-2, or Confidence-2, radar-evading flying boats. Iran's state television says the country's powerful Revolutionary Guard has received its first three squadrons of radar-evading flying boats. Vahid Reza Alaei/Iranian Defense Ministry/AP

Members of the Iranian army's air force re-enact the scene of founder of the Islamic Republic Ayatollah Ruhollah Khomeini's arrival to Iran in 1979 at Merhrabad airport, in Tehran February 1, 2012. Ruhollah Yazdani/Mehr News Agency/Reuters

Iranian navy members celebrate after successfully launching a Ghader missile, at the shore of sea of Oman during Iran's navy drill on Jan. 2, 2012. Iran test-fired a surface-to-surface cruise missile during a drill that the country's navy chief said proved Tehran was in complete control of the strategic Strait of Hormuz, the passageway for one-sixth of the world's oil supply. The missile, called Ghader, or Capable in Farsi, was described as an upgraded version of a missile that has been in service before. Hamed Jafarnejad/Fars News Agency/AP

An Iranian navy vessel launches a missile during a drill at the sea of Oman, Jan. 1, 2012. Iran's navy said it test-fired an advanced surface-to-air missile during a drill in international waters near the strategic Strait of Hormuz. Iran's state TV said the missile, named Mehrab, or Altar, is designed to evade radar and was developed by Iranian scientists. Amir Kholousi/AP

A military personnel carries ammunition on a naval ship during Velayat-90 war game on Sea of Oman near the Strait of Hormuz in southern Iran December 31, 2011. Iran test-fired a new medium-range missile, designed to evade radars, during the last days of its naval drill in the Gulf, the official IRNA news agency quoted a military official as saying. Hamed Jafarnejad/Fars News/Reuters

Iranian military personnel participate in the Velayat-90 war game in unknown location near the Strait of Hormuz in southern Iran December 30, 2011. Hamed Jafarnejad/Fars News/Reuters

An Iranian woman stands in a currency exchange shop in northern Tehran January 3, 2012. The Iranian rial fell to a record low against the dollar following US President Barack Obama signing a bill on imposing fresh sanctions against the country's central bank. Morteza Nikoubazl/Reuters

Iran's Navy commander Habibollah Sayyari (c.) points while standing on a naval ship during Velayat-90 war game on Sea of Oman near the Strait of Hormuz in southern Iran January 1, 2012. Hamed Jafarnejad/Fars News/Reuters

Iranian President Mahmoud Ahmadinejad (c.) listens to his defense minister, Gen. Ahmad Vahidi (l.) during an army parade ceremony marking National Army Day just outside Tehran, Iran, on April 18. Mr. Ahmadinejad extolled Iran's military might during the annual army parade, saying the country is so powerful today that no one would dare attack it. Vahid Salemi/AP

An Iranian-made Zelzal surface-to-surface missile is driven in a military parade to commemorate the 1980-88 Iran-Iraq war, in Tehran, Iran, on Sept. 22. Morteza Nikoubazl/Reuters

Iran's medium range anti-aircraft air defense system Mersad (Ambush) is unveiled during a ceremony in Tehran, Iran, on April 11. Vahid Alaee/Defence Ministry/Reuters

This satellite image taken in 2009 shows a facility under construction inside a mountain located about 20 miles northeast of Qom, Iran. Although there is no confirmation, analysts at both the Washington-based Institute for Science and International Security and London-based IHS Jane's believe this photo shows the most likely location of the newly revealed centrifuge facility. Analysts at both ISIS and Jane's point to apparent tunnel entrances leading into a mountain. GeoEye Satellite Image/IHS Jane's Analysis/AP/FILE

Iran's Supreme Leader Ayatollah Ali Khamenei looks through field glasses as he visits the country's first domestically-made destroyer Jamaran, which was launched in undisclosed waters of the Persian Gulf in southern Iran on Feb. 19. Khamenei.ir/Reuters

Iran's elite Revolutionary Guard's boats (r.) attack an abandoned war ship, being used as a target, during a maneuver in the Persian Gulf, Iran, on April 22. Iran has been holding military maneuvers in the gulf and the Strait of Hormuz annually since 2006 to show off its military capabilities. Mehdi Marizad/Fars News Agency/AP

Iranian Turkmen in traditional dress who are members of the Basij militia, affiliated to the Revolutionary Guard, march in a military parade marking the 30th anniversary of the 1980-88 Iran-Iraq war in Tehran, Iran, on Sept. 22. Vahid Salemi/AP

Members of Iran's Basij militia march during a parade to commemorate the anniversary of the 1980-88 Iran-Iraq war in Tehran, Iran, on Sept. 22. Morteza Nikoubazl/Reuters

A long-range, improved Sejil 2 missile is test-fired in the desert at an unknown location in Iran in 2009. Fars News/Reuters/FILE

The Iranian currency – the rial – has been essential in shoring up a view of Iran as strong and independent in recent years. Now it's collapsing on President Ahmadinejad's watch.

ByRoshanak Taghavi, CorrespondentJanuary 4, 2012

Vahid Salemi/AP

As Iran experiences new, harsh US and international economic sanctions over its nuclear program – a program considered by much of the country as a matter of national pride – a stable currency has become a national security priority.